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This paper aims to examine the changes in global value chains (GVCs) in the years 2020–2022 (times of the COVID-19 pandemic) compared to 2019 (last year before the pandemic). GVCs are illustrated by diagrams based on the statistics on international trade measured by value-added exports and imports. In this paper, the final demand approach is applied to measure international trade by value-added exports and imports and they were computed based on inter-country input-output tables delivered by the Asian Development Bank (ADB). The catchphrase “Made in the World” makes an impression, but in reality, value chains are rarely global. They are rather regional with three centers. “Factory Europe”, “Factory Asia”, and “Factory America” can easily be identified in the years 2019–2022 as there were three large regional supply hubs in GVCs: Germany, China, and the United States. When the years 2020–2022 were compared to 2019, “Factory Asia” with center in China elevated their position in GVCs at the expense of “Factory Europe” with center in Germany and “Factory America with center in the USA.”

This paper assesses the genealogy of competitive indices in international trade and theoretically develops a measure of export threat which estimates direct competition in vertical market segments. We identify the assumption of homogeneity in these export threat measures as a weakness that undermines accuracy. Hence, we develop a new measure of export threat, the direct intra-market threat (DIMT), which incorporates relative vertical and market share changes over time to accurately estimate a country’s direct threat to other exporters in a third market. We argue that the market segmentation method applied in complement to the DIMT estimate provides an all-encompassing methodology in the estimation of export threat, which we argue is superior to the Dynamic Index of Competitive Threat (DICT) and Direct Threat methodologies. The paper uses the case of China and India (CHINDIA) and the Caribbean Community (CARICOM) to assess the empirical estimates of the DIMT relative to DICT and Direct Threat over the period 2000–2021. Our study is motivated by a research gap in the estimation of the competitive threat posed by a large, diversified exporter on Small Island Developing States (SIDS). [ABSTRACT FROM AUTHOR]

This paper examines the impact of bilateral investment treaties (BITs) and technological intensity on exports. It incorporates technological intensity and firm heterogeneity into a simplified static, partial equilibrium model, proposing that BITs increase the extensive margin of exports and have a greater impact in technologically underdeveloped sectors. The empirical analysis utilizes a comprehensive dataset covering 191 countries and 22 sectors, employing Poisson pseudo maximum likelihood (PPML) estimation with various fixed effects to estimate the gravity equations. It provides robust evidence that BITs primarily affect exports by increasing the extensive margin of exports. Furthermore, in sectors with the lowest average technological intensity, an additional BIT is estimated to increase the extensive margin by approximately 18.6 % , while in sectors with the highest average technological intensity, the increase is estimated to be only 8.1 % . [ABSTRACT FROM AUTHOR]

This study analyzes the integrated effects of the USJTA, USJDTA, and the agreement on minerals for electric vehicle batteries. While most previous studies adopted the perfect competitive Armington model to analyze the economic effect of FTAs, it is unrealistic since monopolistic competition is taking place in export markets. To overcome those gaps, this study introduces the computable general equilibrium framework with monopolistic heterogeneity. The empirical results utilize the GTAP-HET transformed data using seven commodity sectors and seven countries which consist of four developed countries such as US, Japan, Canada and the EU and three developing countries such as China, Mexico, and the ROW. The new finding shows that the changes in industry outputs, domestic industry sales, demand for labor and capital, industry sector price, and terms of trade appeared significantly different according to perfect, monopolistic competition, and firm heterogeneity models. [ABSTRACT FROM AUTHOR]

Consumption is an important source of greenhouse gas emissions. This study extends the footloose capital model to investigate consumption-generated emissions and consumption taxes in the presence of endogenous firm locations and different market sizes. We find that consumption taxes cause firm relocation and carbon leakage. That is, tax increase in one country induces firms to relocate to the other country; meanwhile, emissions decrease in that country but increase in the other country. We also show that when countries decide on their consumption taxes cooperatively to maximize the joint welfare, the optimal taxes are identical across them, regardless of different market sizes. However, under consumption tax competition, the larger country imposes a higher tax than the smaller country. [ABSTRACT FROM AUTHOR]

In 1911, the Taft Administration undertook one of the most consequential antitrust prosecutions, charging U.S. Steel with violating the Sherman Act. Some accept Taft's claim that he was bound to act by legal principles. Others view these prosecutions as a pre-emptive attack on Theodore Roosevelt, sparked by rivalries within the Republican Party. Neither account is persuasive. The Republicans did split, but the resulting cleavage does not align with either of these arguments. These prosecutions sprang from a struggle over trade policy. Taft tried to liberalize trade twice. With his second failure, Taft abandoned those efforts. He joined the protectionist Stand-Pat wing, turning to antitrust policy to defend the protectionists' interests. The trade-based interpretation resolves several inconsistencies in the traditional narratives, and yields a clearer description of the resulting cleavage. Taft shifted antitrust policy for tactical reasons, not because of legal principles, nor a personal rivalry with Roosevelt. [ABSTRACT FROM AUTHOR]

This study aims to determine the trigger conditions behind trade wars and explore the prerequisites required to institute trade subsidies. Additionally, it investigates the potential effectiveness of both a trade war and a trade subsidy within an economic framework shaped by the international division of labor, particularly focusing on intermediate goods production. The study formulates a theoretical model for trade wars and derives three crucial findings. Firstly, it establishes that a critical condition for triggering a trade war hinges on maintaining a balanced self-price coefficient of demand, neither excessively large nor small relative to the cross-price coefficient of demand. Secondly, failure to meet this condition would preclude the occurrence of a trade war; instead, it would prompt the emergence of trade subsidies and reciprocal actions between the two countries involved. Lastly, the scale of the trade war or a trade subsidy in this study is not influential in the countries of trade war. Therefore, this study recommends that changing the current market structure of the international division of labor would be necessary to make the trade war or trade subsidies effective.

Trade in intermediate goods has grown in importance over the past decades. However, there is an apparent inability of trade theory to deal with it. A suitable place to look for an explanation is the classical theory, which puts emphasis in the circular aspect of production. This paper uses a classical-production framework, based on Sraffa’s contributions, to investigate the globalization of production. It presents a novel closure to the system of international prices based on given wage disparities. This novel closure emphasizes the relevance of absolute cost advantages in the determination of international prices and the geographical distribution of production. [ABSTRACT FROM AUTHOR]

In this article, we investigate how some MNEs which spread their home culture over time and space to the rest of the world are affecting, in turn, trade flows from home. By selling products embodying cultural information related to their country of origin, those MNEs embrace the role of ambassadors of their home country. We argue that IKEA offers an ideal case to identify a multinational's culture-promotion effect on trade. We build a dataset on IKEA's presence in foreign markets between 1995 and 2015 and merge it with disaggregated product level trade between pairs of countries. We find solid evidence of an externality linked to IKEA: a setting of an IKEA new store in a destination increases trade flows by around 2% from Sweden for products that resemble to what the multinational offers (despite being completely unrelated to that multinational). This result is driven primarily by the products identified to encompass a high-cultural content. Other robustness checks and tests seem to be very much consistent with the hypothesis of IKEA promoting the Swedish culture to the world. [ABSTRACT FROM AUTHOR]